Concerned about supply disruptions from Iran, Mangalore Refinery and Petrochemicals Ltd (MRPL), is in talks with crude oil suppliers from Saudi Arabia and Abu Dhabi.
In its annual report for 2010-11, MRPL said it is planning to finalise the crude import deals for 2012-13, by September this year itself.
Referring to the recent geo-political developments in Middle East countries, the report said that these developments may affect crude supply of MRPL as it procures major portion of crude from Iran and Middle East.
The company said that it is in discussion with its other term crude oil suppliers like ADNOC (Abu Dhabi National Oil Company) and Saudi Aramoc for supply of additional volume of crude oil. These will reduce the dependency on few sources and reduce the crude supply risk.
The report mentioned that like all other refining companies, MRPL is also exposed to the risk of volatility in international prices of crude oil and petroleum products along with crude supply risk.
“Though Iran is not much affected due to current turmoil, but since it is a major source of supply for MRPL the impact due to other reasons, namely EU sanctions, may affect continued supply from Iran.
“Like other oil marketing companies, MRPL is also facing difficulty in remitting the payments against import of crude oil from Iran due to EU sanctions and dismantling of Asian Clearing Union by Reserve Bank of India with effect from December 23,” it said.
It maintained that currently supplies are maintained based on an interim arrangement. “But considering the enhanced level of sanctions against Iran in future, non-resolution of current crisis, the availability of Iranian crude may be difficult and supply may not continue till an indefinite period,” it said.
“Accordingly, it has been decided to finalise the term contracts for crude oil import for the year 2012-13 well in advance by September 2011, in order to have more suppliers,” the report said.
According to the report, the company is considering to import crude oil in VLCC (very large crude carrier) from far flung areas and discharge through lightrage till SPM (single point mooring) facility becomes operational at New Mangalore Port.
The scrip of MRPL closed at Rs 78.50 on BSE on Tuesday against the previous closing of Rs 79.85.